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2025 Supreme(Online)(Mad) 66468
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mrs. Justice J. Nisha Banu, Mrs. Justice S. Srimathy, JJ
S.Loganathan – Appellant
Versus
Recovery Officer II, Debts Recovery Tribunal III, Chennai – Respondent
W.P.(MD)No.5840 of 2023
For the Appellants/Petitioners: Mr.M.Rajarajan
For the Respondents: Mr.N.Dilip Kumar, Mr.R.J.Karthick, M/s.D.Farjana Ghoushia
The court reaffirmed that territorial jurisdiction is crucial in recovery proceedings, and actions beyond such limits are void.
Headnote:(A) Recovery of Debts and Bankruptcy Act, 1993 - Section 19(23) - Writ of Certiorari - The petitioner challenged the Recovery Officer’s jurisdiction on grounds of executing orders pertaining to properties outside his territorial limits and lack of authority in issuing decrees against deceased persons. The court observed that execution of a Recovery Certificate should be conducted by the Tribunal within whose jurisdiction the property is situated. (Paras 6.4, 10, 30)
(B) Jurisdiction - The court held that the Recovery Officer acted without jurisdiction by issuing a warrant of attachment of properties outside its limits, rendering actions null and void. The petitioner was entitled to redress, aligned with principles of territorial jurisdiction in recovery proceedings. (Paras 29, 30)
Facts of the case:
The petitioner contested the legality of the Recovery Officer’s actions regarding the execution of a decreed amount against deceased borrowers and challenged the Tribunal's territorial jurisdiction concerning property execution.
Findings of Court:
The Recovery Certificate must be executed by the appropriate Tribunal in the jurisdiction where the property lies. The Recovery Officer’s actions lacked authority since the property was untreated by the correct Tribunal.
Issues: Whether the Recovery Officer had the authority to act beyond territorial limits and against deceased individuals without proper impleadment of heirs.
Ratio Decidendi: Jurisdiction is confined to the forum where the property lies, and any decrees relating to properties outside must be handled by the correct Tribunal, voiding unauthorized actions.
Result: Writ petition partly allowed as stated, facilitating necessary jurisdictional procedures.
| Table of Content |
|---|
| 1. proper procedural adherence is vital for recovery. (Para 3 , 4 , 26) |
| 2. jurisdiction adherence in recovery actions. (Para 6 , 10 , 16) |
| 3. validity of warrants against deceased parties. (Para 22 , 23 , 24 , 29) |
ORDER
(Order of the Court was delivered by S.SRIMATHY, J.)
The present writ petition is filed for issuance of a Writ of Certiorari, to quash the 1st respondent’s proceedings, dated 13.01.2023, passed in DRC.No.14 of 2022 on the question of territorial jurisdiction.
2. (a) The brief facts, as stated in the affidavit, are that the respondent Bank had filed a suit in O.A.No.216 of 2013 and also initiated measures under the SARFAESI Act in S.A.No.213 of 2013 against the petitioner for the default in the loan amount.
(b) The petitioner, while challenging the Bank's action, approached the Debt Recovery Tribunal under Section 17 of SARFAESI Act and also contested the suit.
(c) The petitioner contended that the classification of the account as NPA was not in accordance to law and specifically urged that the books of accounts relied upon by the bank were erroneous and, therefore, the alleged debt had not been crystallized.
3. The learned counsel for the petitioner submits that the Debts Recovery Tribunal, upon hearing the matter, found that the respondent Bank had at first denied the very existence of the disputed account; secondly Bank had failed to produce the bank statement for more than 10 years. The said account statement was produced one fine day after a decade. The Tribunal also observed that the very existence of such a disputed accounts and books of accounts maintained by the Bank is contrary to the provisions of the Bankers’ Books Evidence Act.
4. According to the learned counsel for the petitioner, the Tribunal allowed the second appeal filed by the petitioner under the SARFAESI Act and quashed the measures taken by the respondent Bank. However, the Tribunal proceeded to allow O.A. No.216 of 2013, and rendered a self-contradictory order.
5. It is the submission of the learned counsel for the petitioner that even though the petitioner was aggrieved by the order passed in O.A. No.216 of 2013, the same has been challenged in the present proceedings. The writ petition is confined to questioning the attachment order passed by the Recovery Officer–II, DRT–III, Chennai, on the ground that the same has been passed beyond its territorial jurisdiction, thereby warranting interference of this court under supervisory powers.
6. The contention of the learned counsel for the petitioner is on the following points:-
6.1. The respondent Bank has filed an appeal against the order of the Tribunal passed in O.A. No.216 of 2013 in R.A. No.45 of 2021. In the said appeal, a direction was passed by the DRAT on 22.09.2021 directing the Bank to implead legal heirs of the deceased. However, the Bank has failed to implead the legal heirs of the deceased borrower. Whereas, the Bank allowed the appeal to remain pending without due prosecution. Hence the petitioner has approached this Court under Article 226 of the Constitution.
6.2. The Recovery Officer had exercised his power is excess of his territorial jurisdiction and he has proceeded to execute the decree in D.R.C. No.14 of 2022, which had been erroneously transmitted to him by DRT–III, Chennai.
6.3. The property in question is situated outside the territorial limits of DRT–III; hence the proceedings suffer from want of inherent jurisdiction.
6.4. Section 19 (23) of the Recovery of Debts and Bankruptcy Act , 1993, mandates that where a Recovery Certificate pertains to property outside the territorial jurisdiction of a Tribunal, the same shall be returned to the Tribunal which had issued it.
6.5. In the instant case, the impugned recovery order ie.D.R.C.No.14 of 2022 arises from O.A. No.216 of 2013 dated 16.09.2020 but the said order is already under challenge before the Appellate Tribunal in R.A. No.45 of 2021 and was last heard on 25.06.2021. When the said matter is pending before the App
